The crucial role of telomerase in stem cell maintenance and tumorigenesis has long been recognized. Human pluripotent stem cells have active telomerase and therefore long-term renewal capacity, but most human somatic cells lack telomerase function and therefore have a limited capacity for renewal. Patients with telomerase deficiencies that cause bone marrow failure, aplastic anemia and pulmonary fibrosis have accelerated telomere shortening, which gives rise to these tissue failures. Opposite to this effect is the telomerase reactivation that underlies the proliferative immortality of most human cancers. Despite these strong implications for human health, we lack understanding of the molecular mechanisms by which human cells regulate telomerase activity to ensure tissue homeostasis and how its dysfunction can lead to tumorigenesis. The natural regulation of telomerase activity in human tissue and the impact of telomere shortening on untransformed human cells can only be studied in a primary human stem cell system. Until recently, technical limitations, especially the inefficiency of genetic manipulation, have impeded the use of human stem cells as research tools. We have overcome this by establishing the use of site-specific nucleases to efficiently genetically engineer human pluripotent stem cells (hPSCs). This technology allows us, for the first time, to investigate two key regulatory events of human telomerase function in a genetically defined human stem cell system: its transcriptional regulation and the recruitment of telomerase to telomeres. The experiments described in Aim 1 use genetically engineered hPSCs to elucidate the molecular mechanisms that transcriptionally regulate telomerase in stem cells and how the expression of telomerase is silenced upon differentiation. The experiments outlined in Aim 2 will reveal the mechanisms that control telomerase recruitment to telomeres and the mechanisms utilized by telomere-binding proteins to regulate telomerase activity after this recruitment step. These experiments will uncover how human stem cells establish a telomere length set-point that provides a sufficient telomere reserve for human tissue regeneration while also functioning as a tumor suppressor mechanism by ultimately restricting the proliferative capacity of differentiated cell lineages. In Aim 3 we will identify the genetic alterations that led to telomerase-independent immortalization by the induction of the alternative telomere maintenance pathway, which is used by the minority of cancers that have not reactivated telomerase expression. Taken together, the experiments described here will use a genetically defined human stem cell model system to elucidate the tightly regulated steps in the telomere maintenance pathway and to mechanistically understand how mutations in this pathway promote cancer formation. Such a complete mechanistic understanding will open novel avenues of telomere maintenance inhibition as specific anti-cancer therapeutics that do not compromise the long-term proliferation of normal stem cells.